Twitter IPO Value Beyond $10 Billion, Suggests WSJ Column

A financial writer who set out to prove that Twitter isn't worth an estimated $10 billion initial public offering was stopped in his tracks when "the facts intervened" and he discovered it could be worth even more.

Twitter's main source of revenue has been "promoted" tweets, sponsored tweets that jump to the top of newsfeeds for Twitter's 500 million-plus users. Berman said that because advertising on Twitter and Facebook is becoming more appealing to businesses, in 2014 he expects Twitter will exceed $800 million in profits.

If Berman is correct, Twitter will have to increase the worth of each of its users from $4 to $7, in order to reach the vaunted $10 billion IPO. Berman estimates that the value shift could come as early as 2016, which is a conservative estimate, compared to Facebook's growth rate.

If Twitter continues growing on a 33 percent upward trend, as the micro-blogging website has in the last few years, the social network will add 500 million users by 2016. They will then match Facebook's one billion users.

If the growth increases this way, the company will earn $3.5 billion a year in revenue by 2016. Berman notes this is the same number Google achieved in 2004. Based on those numbers, Berman estimates Twitter's worth will be $12.5 billion.

Setting out to prove that Twitter isn't worth an estimated $10 billion initial public offering, a Wall Street Journal financial was stopped in his tracks when "the facts intervened" and he discovered the IPO could be worth even more.